Stocks or currencies, the choice is based on the nature of the trader.
When deciding to pursue a career as a trader, most beginners are faced with a choice between stocks or currencies, the stock exchange or the forex market.
It would seem that there is no significant difference between which instruments are traded in the MetaTrader terminal: the orders are the same, the indicators are the same, and often the brokers are the same.
But if you analyze both types of trading, you can find a lot of differences that influence the choice of one asset or another.
1. Leverage – when trading currencies, it's typically several times, sometimes hundreds of times, higher. This means that profitability and risk in Forex are also proportional to leverage. While leverage of more than 1:5 is rare in stock trading, currencies are often traded with leverage as high as 1:100.
3. Automation – there are practically no advisors that trade stocks, while autotrading occupies a huge niche in Forex trading.
4. Complexity and simplicity – in my opinion, Forex trading is simpler here the fundamental thing is technical analysisTo be a good stock market trader, you need to have a more in-depth knowledge of economics, have an idea of what the financial condition of a company is and how the price of shares is formed.
5. Trading intensity – stock trades can be held for months, and sometimes even years, as dividends provide additional profit in addition to price growth, and it's quite difficult to profit from the price with little leverage.
At the same time as intraday trading on Forex requires constant involvement, which is compensated by greater profits.
6. Accessibility – there are many more brokers offering forex trading, and choice always generates competition, meaning trading is more convenient, and commissions for opening trades are lower.
Moreover, it is not so easy to find a broker that provides full access to the stock market, and does not trade only the 100 most popular stocks.
So, if you're a gambler looking for quick profits and don't have a deep understanding of economics, the Forex market is your best bet. You can trade automatically using expert advisors or copying trades from professionals.
At the same time, if you're an investor who's more interested in investing in corporate assets than in buying faceless currencies, and then tracking how your business grows and develops, as well as what changes are occurring in your chosen economic sector, your choice is also obvious: the stock market.
The size of capital also plays a significant role in the choice; I would not recommend starting stock trading without a capital of $5,000; this aspect will probably be the deciding factor for most beginners.
